Amazon offers two main ways to get orders to customers. With Fulfillment by Amazon (FBA), Amazon stores and ships your inventory. With Fulfillment by Merchant (FBM), you do, either from your own space or through a third-party logistics (3PL) warehouse. This guide explains how FBM works, what it costs, and when it is the better choice.
What Amazon FBM means
FBM stands for Fulfillment by Merchant. You list products on Amazon, and when an order arrives, the seller is responsible for storing the item, packing it, shipping it, and providing valid tracking. Amazon hosts the listing, processes the payment, and sets the performance standards, but it does not pick, pack, or ship FBM orders.
How an FBM order is fulfilled
- A customer places an order on Amazon.
- The order appears in Seller Central with a ship-by date.
- The item is picked, packed, and labeled by you or your 3PL.
- The parcel is handed to the courier before the ship-by date.
- Tracking is confirmed in Seller Central, and the customer receives the order.
Using a 3PL warehouse for FBM
Many FBM sellers do not have the space or time to pack orders themselves. A 3PL warehouse handles the physical work: it receives your inventory, stores it, packs each order in a plain, unbranded box, applies the shipping label, and drops parcels off with the courier.
3PL warehouses usually charge a per-label fee for this service, and every warehouse quotes differently, so always get the rate upfront. You stay in charge of the seller account and the product decisions.
For FoXedo clients, orders can be handled at FoXedo’s own warehouse when space is available, or at a partner 3PL warehouse from our network. We confirm the warehouse and its fee before the account starts.
What FBM costs
- Referral fee: a percentage of the total sale price, including any shipping the buyer pays, set by product category.
- Shipping labels: the carrier cost for each order.
- 3PL fee: the per-label fee if a warehouse packs your orders.
- Packaging and returns: boxes, fill, and an allowance for returns.
- Selling plan: the Professional plan’s monthly subscription.
Want the numbers for a specific product? Use our free Amazon FBM calculator.
FBM vs FBA at a glance
| FBM | FBA | |
|---|---|---|
| Who stores inventory | You or your 3PL warehouse | Amazon fulfillment centers |
| Who packs and ships | You or your 3PL | Amazon |
| Main Amazon fees | Referral fee | Referral fee plus FBA fulfillment and storage fees |
| Control over packing | Full control | Amazon’s process |
| Best for | Bulky, slow-moving, or varied catalogs; sellers with a reliable 3PL | Fast-moving, standard-size items |
Metrics Amazon measures
Because you control fulfillment, Amazon tracks how well you do it. The key seller-fulfilled metrics include order defect rate, late shipment rate, pre-fulfillment cancel rate, and valid tracking rate. Amazon publishes targets for each; check the current values in Seller Central, because staying within them protects your account.
When FBM makes sense
- Bulky or heavy items where FBA fees are high
- Slow-moving products that would sit in FBA storage
- Large or frequently changing catalogs
- Sellers who already have, or can arrange, a reliable 3PL warehouse
Many sellers use both: FBA for fast movers and FBM for the rest.
Frequently asked questions
Does Amazon ship FBM orders?
No. The seller or their 3PL ships FBM orders. Amazon only ships orders fulfilled through FBA.
Do I need my own warehouse for FBM?
No. A 3PL warehouse can receive, store, pack, and ship for you for a per-label fee.
Is FBM cheaper than FBA?
It depends on the product’s size, weight, price, and sales speed. Compare both with real numbers before deciding.
